A great deal of modern commerce involves the use of credit accounts that allow consumers to obtain goods, services, cash and other commodities in exchange for an agreement to pay the requisite fees under pre-defined terms. Many of these consumers or account-holders/borrowers honor their agreements and pay the requisite fees according to the agreed-upon terms. However, a certain number of account-holders are not willing or are not able to uphold their end of the agreement and do not pay the requisite fees. When payment terms are violated, creditors may be forced to take action to collect the debt.
A creditor may have several options for collecting the debt. A creditor can contact the borrower and renegotiate the agreement or take legal action to enforce the agreement. Both of these options involve additional work and expense. Contacting a borrower may involve research to locate the borrower and additional time to travel to the borrower and make contact. Once contacted, the borrower may be uncooperative. In many cases, this additional expense cannot be recovered by the creditor. The expense of legal action is also well known and, in many cases, may be more than the debt to be collected. Furthermore, a borrower may be judgment-proof, wherein he or she does not have enough assets to cover the debt even when a legal action forces such payment.
If a creditor cannot find a method for efficient collection of over-due debts, the creditor may have to incur unexpected losses.
Many account-holders who do not have delinquent accounts also seek a convenient method for paying and managing their debts.